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Abstract
We examine how transmission congestion alters the environmental benefits provided by renewable generation. Using hourly data from the Texas and Mid-Continent electricity markets, we find that relaxing transmission constraints between the wind-rich areas and the demand centers of the respective markets conservatively increases the non-market value of wind by 31% for Texas and 13% for Mid-Continent markets. Much of this increase in the non-market value arises from a redistribution in where air quality improvements occur { when transmission is not constrained, wind offsets much more pollution from fossil fuel units located near highly populated demand centers.